Yeah, I think so. It's been another fascinating and complex week for financial markets as we enter this great crescendo of data and central bank activity at the end of 2023. While the central bank data focus of the week has been very clearly in the U. S. With services ISM and a raft of employment metrics culminating in the non-farm payroll report on Friday afternoon, European fixed income and the Euro have grabbed at least some of the limelight as market sentiment and indeed official rhetoric has turned more dovish. Now, markets have spent much of the week trying to price ECB rate cuts ahead of the Fed and in excess of the Fed. We have doubts that this will prove to be the case, but either way, next week will be a huge week for the global macro backdrop. And here are a few things that we will have our eye on.

Firstly, we get action and data from around the world with Japan of increasing market focus, with the sharp narrowing of the US-Japan yield differentials of late, and intensified by recent remarks from Governor Ueda and Vice Governor Himino in relation to the prospects of finally exiting negative interest rate policy. Next week's TANCAN report for Q4, therefore, will be a core focus. Global PMI reports on Friday alongside the China suite of data for November will also be closely watched for signs of stabilisation in Europe and China and, by extension, European yield curves and China equities. Furthermore, we get commentary from RBA Governor Bullock and the active meetings from Norges Bank and the Swiss National Bank where the recent inflation decline is perhaps the most striking or policy reaction worthy of the developed markets. A big week for global data and for global markets.

Secondly, part two of the developed market Central Bank wrap for 2024 with the ECB and Bank of England meetings. With neither likely to change policy rates, the focus of markets will be all about the narrative around the recent inflation moderation and the expectations of the growth trajectory into 2024. In the UK, the backdrop remains more complicated with inflation down sharply in October, but still with more than double the target level, the November data a week after this policy meeting and thus an unknown for the Bank of England at this stage. While growth projections are low and the consumer likely fragile, the recent data has shown some resilience bounces in the PMI, confidence and house price data. So it's likely a tough call for the Bank of England on forward guidance against what is still a complex backdrop. This likely means a split decision again at the December meeting for the Bank of England. In Europe, recent inflation underperformance has driven a sharp repricing in rate curves and the euro, and markets now expect an earlier and more rapid pace of rate cuts in 2024, relative to the US. However, while growth likely remains modest, positive real wage growth will likely support demand going forward and it is less clear to us that the ECB will be minded or able to live up to the newly dovish market sentiment leaving the risks for us to the topside for rates and for the Euro.

Then finally, and likely most consequentially, we get the Fed. Again, it is very unlikely that we get any policy action from the FOMC but following Tuesday's all-important inflation release and noting that globally, we have seen downside misses for November inflation print so far, the narrative around the evolution of the balance of risk to the growth, inflation backdrop in the US and the updated SEPs will be key. At the September meeting, the quarterly Summary economic projections had median dots at around 5.625 percent for the close of 2023, 25 basis points above its current setting, and at 5.125 for the end of 2024, pricing two cuts. Current market pricing in the Fed Funds Futures has the policy rate around 100 points lower than that September projection. Therefore, it's key to the market assessment of this 2024 rate path relative to the Fed view will be the forecast for the unemployment rate in 2024 and therefore the state of growth within the economy. The main focus of the close to this week in the form of the non-farm payroll report. It's a huge week for markets and plenty of action to keep the eggnog and Mariah Carey on hold for a little bit longer.